William C. Durant — the Man Who Founded GM and Died Running a Bowling Alley

Summary

William Crapo Durant was one of the great empire-builders of the American automobile age — and one of its most complete financial casualties. Having already made a fortune in horse-drawn carriages, he founded General Motors on September 16, 1908, by bundling together a string of fledgling car and parts companies, and he later co-founded Chevrolet. At his peak in the 1920s his fortune was enormous — popularly estimated as high as nearly $1 billion at the height of the boom — and he was a titan of American industry.

Durant's genius was promotion, expansion, and the audacious deal; his weakness was that the same restless, leveraged optimism that built his empires repeatedly cost him control of them. He was forced out of General Motors not once but twice — in 1910 by the bankers who refinanced his over-extended company, and again in 1920 when a postwar slump and his own stock-market commitments left him unable to hold on.

After losing GM the second time he launched Durant Motors and threw himself into the booming stock market of the late 1920s, trading and promoting shares on an enormous scale and on heavy margin. The 1929 crash destroyed him. The man who had built the world's largest automaker saw his fortune wiped out, Durant Motors was liquidated in 1933, and in 1936 he filed for bankruptcy, listing assets of only a few hundred dollars against liabilities of roughly a million.

Durant spent his final years in Flint, Michigan — the city where his career had begun — running modest ventures including a bowling alley (the North Flint Recreation Center, opened 1940) and an attached drive-in restaurant, the Horseshoe Inn, which he promoted with the same enthusiasm he had once brought to building GM. A stroke in 1942 ended his plans to build a national chain, and he died on March 18, 1947, his bills reportedly covered by Alfred P. Sloan and the Chrysler family. He remains the archetype of the builder who could create vast wealth but never learned to hold it.

Timeline

The Fortune

William Crapo Durant was born on December 8, 1861, in Boston, the grandson of a Michigan governor, and made his first fortune long before the automobile. In 1886, with partner Josiah Dallas Dort, he built the Durant-Dort Carriage Company in Flint, Michigan — reportedly turning a roughly $2,000 stake into a multimillion-dollar enterprise — into one of the largest horse-drawn carriage manufacturers in the United States. The business made him a wealthy man and taught him the arts of mass production, salesmanship, and aggressive expansion.

Durant was at first skeptical of the noisy, unreliable motorcar, but he saw its commercial future and took over the struggling Buick Motor Company in 1904, rapidly turning it into one of the country's top-selling automobiles. From that base he conceived a far grander idea: rather than bet everything on one model or maker, he would assemble many under a single corporate umbrella to spread risk and dominate the industry. On September 16, 1908, he incorporated General Motors, and over the next two years he consolidated roughly thirteen car companies — including Buick, Oldsmobile, Oakland (later Pontiac), and Cadillac — and about ten parts-and-accessories makers under GM's control.

The strategy was visionary and is essentially the structure of GM to this day. But Durant built it through relentless acquisition financed largely with stock and debt, often paying generously for companies of uncertain value and stretching the young corporation's finances to the limit. He was a builder who never stopped buying — a trait that created an industrial giant and, repeatedly, the financial fragility that would cost him control of it. At his height in the 1920s, his personal fortune ran well into the hundreds of millions, with some popular accounts placing it near $1 billion at the peak of the bull market.

The Cracks

The first crack came almost immediately. General Motors' breakneck expansion left it dangerously over-extended, and in 1910 a credit crunch caught the company short of cash. To survive, GM had to accept a rescue loan from a syndicate of bankers — and the price of that money was Durant himself. The bankers took control and pushed the founder out of the company he had created, installing more conservative management. It was the first demonstration of the pattern that would define his life: Durant could build an empire, but his leveraged, expansionary style left him unable to keep it when conditions turned.

Durant did not retreat. Undaunted, he backed the race-car driver and engineer Louis Chevrolet and in 1911 helped found the Chevrolet Motor Company, building it into a major automaker in its own right. Then, in one of the boldest maneuvers in business history, he used Chevrolet's success — and the financial backing of Pierre S. du Pont and the du Pont chemical interests — to quietly buy up GM stock and engineer his return. By 1916 Durant had regained control of General Motors, this time bringing Chevrolet in as a GM division and du Pont in as a major shareholder, and he served as president until 1920.

For a few years he reigned again, expanding GM further. But the same over-extension reasserted itself. The sharp postwar recession — the Panic of 1920 — hit the auto industry hard, GM's stock fell, and Durant had personally bought enormous amounts of that stock on margin to support its price, leaving him on the hook for sums he could not cover as it dropped. To prevent the founder's personal collapse from dragging the company down, du Pont and the bankers again organized his exit, covering his obligations in exchange for his departure. In late 1920, Durant was forced out of General Motors for the second and final time.

The Collapse

Even a second ouster from his own company did not slow him; within weeks he was back in the automotive business. In 1921 Durant founded Durant Motors, a new car company through which he hoped to challenge GM and Ford directly, and for a few years it produced cars in respectable numbers under several brand names. But Durant Motors never achieved the dominance of his earlier creations, and Durant's attention was increasingly drawn to a more seductive arena: the soaring stock market of the 1920s.

Durant became one of the most prominent operators on Wall Street in the boom years, trading and promoting stocks on a colossal scale, often on heavy margin, and reportedly was at times the single largest individual player in the market. The bull market suited his temperament perfectly — optimistic, leveraged, and convinced the rise would continue. When the market crashed in October 1929, the same forces that had twice cost him GM destroyed him completely. His vast, margined positions evaporated, and the fortune he had spent decades building was wiped out.

The end was protracted. Durant Motors was liquidated in 1933, and Durant's personal finances disintegrated through the Depression. In 1936, the man who had founded General Motors filed for bankruptcy, his petition listing assets of only a few hundred dollars — by common accounts around $250, chiefly the clothes he wore — against liabilities of roughly $1 million. He had, in the most literal sense, almost nothing left of one of the great industrial fortunes of his era.

What Went Wrong

After

Durant's final act was, in its way, the most poignant chapter of an extraordinary career. Returning to Flint, Michigan — the carriage town where he had first made his name and where Buick and GM had been born — he poured his irrepressible enthusiasm into modest ventures. In 1940 he opened the North Flint Recreation Center, a bowling alley in the shadow of GM's Buick City complex, and built alongside it the Horseshoe Inn, one of the early drive-in restaurants in the country. He genuinely believed bowling could become a great popular industry and dreamed of a national chain; the scale was tiny, but the salesman's faith was undimmed.

A stroke in 1942, suffered after a trip to inspect a cinnabar mine in Nevada, ended those plans and left him in failing health. He spent his last years in reduced circumstances in New York, reportedly dependent on quiet financial support from others — including, by various accounts, Alfred P. Sloan, who had risen at the company Durant founded, and members of the Chrysler family, along with a pension arranged by R. S. McLaughlin. He became comatose in mid-March 1947 and died in New York on March 18, 1947, at the age of 85.

The contrast is the whole point of his place in Gilded Ruin: General Motors, the corporation he conceived and assembled, grew into the largest industrial company in the world, while its founder died with almost nothing. Durant is remembered as a creative force of the first rank and a cautionary figure of equal stature — proof that the talent to build an empire is entirely distinct from the discipline to keep a fortune, and that leverage and optimism, the very engines of his rise, were also the precise mechanism of his ruin.

Lessons

References

• William C. Durant Wikipedia
• GM Founder William Durant's Story General Motors Heritage
• William Crapo Durant Encyclopedia.com
• How the Founder of General Motors Died a Penniless Bowling Alley Operator Jalopnik